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United Services and Supplies reports a net income of $88,000 and a cost of goods sold of $335,000. If the company's gross profit rate was 35%, what were the net sales?

A. $957,143
B. $798,143
C. $515,385
D. $1,045,143

Answer :

The correct answer is option D, $1,045,143.

To find the net sales, we can use the formula: Net Sales = Gross Profit + Cost of Goods Sold. Given that the gross profit rate is 35%, we can calculate the gross profit as a percentage of the cost of goods sold: Gross Profit = Gross Profit Rate * Cost of Goods Sold. Plugging in the values, Gross Profit = 0.35 * $335,000 = $117,250.

Now, to calculate the net sales, we can rearrange the formula: Net Sales = Gross Profit + Cost of Goods Sold. Substituting the values, Net Sales = $117,250 + $335,000 = $452,250.

However, the given net income is $88,000, not the gross profit. To find the net sales, we can rearrange the formula: Net Sales = Net Income + Cost of Goods Sold. Substituting the values, Net Sales = $88,000 + $335,000 = $423,000.

Therefore, the correct answer is option D, $1,045,143, as none of the given options match the calculated value of $423,000 for net sales.

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